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As market waters get rougher with the downturn sweeping across the country, this network executive says two things can help real estate professionals not just weather the storm but come out stronger than ever.
One Agency founder and chief executive Paul Davies acknowledged that agents and principals are currently “doing it tough”, as the high continues to wear off from the housing boom seen in the last two years, which drove market activity (as well as profits) into a frenzy.
However, he pointed out that there are still those managing to make hay when the sun isn’t shining on property markets.
“But I also know, from speaking to One Agency licensees across Australia, that some are thriving. The two big differences are that their businesses are lean and their minds are sharp,” he said.
On the business side of things, Mr Davies said that principals and agents who manage to triumph over market downswings are those who take time to improve their financial position by regularly reviewing expenses and always looking for more cost-efficient ways to hit the same targets or achieve the same outcome.
“For example, they’re renting premises in secondary locations rather than main streets, cancelling subscriptions they’re not using, outsourcing jobs rather than hiring staff to do them in-house, refinancing to lower-rate loans and switching from high-commission franchise groups to no-commission groups like One Agency,” he said.
When it comes to mindset, he claims that the agents that rise above the rest are those who tend to keep their heads on their shoulders — even when the going gets tough.
“They stay calm, no matter what the market and economy are doing. As a result, they make clever decisions,” he said.
For principals and agents who are finding it difficult to operate at optimal levels, Mr Davies urged them to be proactive and “take action” to stop smaller issues from snowballing.
“In an emergency, businesses often cut staff because that’s the fastest way to reduce costs. Unfortunately, it’s also the fastest way to reduce revenue, and so should be avoided if possible. If you make smaller cost savings today, you hopefully won’t need to make larger ones tomorrow,” he said.
The network executive also cautioned that being in a desperate situation can also make it difficult for agents to win business, as it also translates to weaker body language during presentations to customers.
He also emphasised that if an agent’s financial position deteriorates, mental health will soon decline as well — which can have a detrimental impact on one’s day-to-day performance.
“I’ve been in real estate for more than four decades, and have experienced a dizzying array of highs and lows during that time. But I’ve managed to survive — even though, at times, I’ve been close to the edge,” he said.
“That’s taught me the value of running a lean business, planning for the long-term and staying level-headed. If you’re doing it tough at the moment, I’d urge you to take action now, both to improve your current situation and to stop this problem [from] recurring in the future.”
Yubi Baral from One Agency Gungahlin said he recognised that he needed to make critical changes in order to thrive in the shifting market conditions.
The Canberra-based agent said that recognising that he needs to “work harder and smarter than during the boom” made the difference between sinking and swimming during these tough times.
“It’s a slower market compared to the start of the year, but business is still being done and people still need to sell,” he said.
He emphasised that with properties no longer selling like hotcakes, agents need to focus on educating both buyers and sellers.
“With vendors, you need to explain the importance of pricing a home correctly and investing in marketing. With buyers, you need to highlight the benefits of the property because buyers have far more options now. Also, you need to do more work to put deals together,” he said.
Mr Baral also expressed his confidence that zeroing in on real estate fundamentals will help his business continue to deliver solid results, even as market conditions become more challenging.
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